You have been asked by the management of your company to evaluate the proposed acquisition of a new machine.

You have been asked by the management of your company to evaluate the proposed acquisition of a new machine.  The machine’s basic price is $50,000, and it will cost another $10,000 to modify it for the special use by your company.  The machine falls into the MACRS 3-year class property (the MACRS percentage allowances are 0.33, 0.45, 0.15, and 0.07 in years 1,2,3,and 4 respectively).  The project will require an increase in net working capital of $2,000 and it will last for three years at the end of which the machine can be scrapped for $20,000.  The purchase of this machine will have no effect on revenues, but the management expects to have labor cost savings of $20,000 per year.  The marginal tax rate of your company is 40 percent.

  1. What is the amount of initial cash flow in year 0, i.e., the initial investment, if your company requires the new machine?
  2. What are the operating cash flows in year in years 1,2, and 3?
  3. If the project’s cost of capital is 10 percent, should you recommend the project?

Show more

Calculate Your Essay Price
(550 words)

Approximate price: $22

Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
$26
The price is based on these factors:
Academic level
Number of pages
Urgency
Basic features
  • Free title page and bibliography
  • Unlimited revisions
  • Plagiarism-free guarantee
  • Money-back guarantee
  • 24/7 support
On-demand options
  • Writer’s samples
  • Part-by-part delivery
  • Overnight delivery
  • Copies of used sources
  • Expert Proofreading
Paper format
  • 275 words per page
  • 12 pt Arial/Times New Roman
  • Double line spacing
  • Any citation style (APA, MLA, Chicago/Turabian, Harvard)

Our guarantees

Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.

Money-back guarantee

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

Read more

Zero-plagiarism guarantee

Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.

Read more

Free-revision policy

Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.

Read more

Privacy policy

Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.

Read more

Fair-cooperation guarantee

By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.

Read more